Sat December 22, 2012

Naughty Or Nice? Retailers Use Smiles To Fight Self-Checkout Theft

Retailers are finding that shoplifting at self-serve checkout lines is surprisingly common.

Jessica HillAP

With Christmas on Tuesday, the last-minute holiday shopping this weekend should make for some of the biggest spending all year. Those busy stores are also going to be on the lookout for shoplifters, especially in self-checkout lanes, where it is a big problem.

At a supermarket in Sedalia, Mo., people are stocking up for their traditional holiday dinners. Employees help customers at the store's four self-service lanes, but every so often they catch items that customers did not scan.

With a smile and a helping hand, the employees are there to make sure all of a customer's items get scanned and paid for.

"That is what we call aggressive hospitality," says Doug Haworth, who is in charge of loss prevention at Wood's Supermarkets. He says the aggressive hospitality is a tactic to reduce theft.

"At self-checkout, if the intent is to leave the store without paying for anything, what we've seen is they usually make it worth their while," he says.

That's costing stores big time. Richard Hollinger, who studies theft for the National Retail Federation, says many companies are removing their self-checkout lanes, claiming customers don't like them. In reality, he says, they're just losing too much money.

"They've done the cost-benefit analysis, and there were some negatives that they never really anticipated," Hollinger says.

One reason is that at self-checkout, wannabe shoplifters have a great excuse.

"If I didn't scan everything, I can say, 'Oh, I couldn't tell what was going on, it was confusing, it was beeping at me,' " says Malay Kundu, the CEO of StopLift, a Massachusetts company that uses computerized video analysis to flag shoplifting.

The company's videos show people scanning only some items and putting others directly into the bag, ringing up pricey produce at the price of bananas or scanning cheap items and putting more expensive ones on the weight sensor.

Amazingly, in one video, a shoplifter calls over the attendant after having trouble getting her coupons accepted.

"This is a pretty common thing," he says, "because you might as well get a discount on the few things you paid for."

Right now StopLift's service only tells stores after the fact which transactions to follow up on, but Kundu is testing a system that would alert employees in real time.

For now, though, many retailers are holding off or staffing up with aggressive hospitality. So when that self-checkout attendant is super-nice to you this weekend, she may just be making sure that you're not being super-naughty.

This is WEEKEND EDITION from NPR News. I'm Scott Simon. With Christmas on Tuesday this year, all the last-minute holiday shopping this weekend could be huge. But those busy stores are also going to be on the lookout for some little light-fingered elves, especially at self-checkout machines, where shoplifting has become a big problem. Curt Nickisch of member station WBUR reports.

CURT NICKISCH, BYLINE: At a supermarket in Sedalia, Missouri, people are stocking up for their traditional holiday dinners. Employee Chloe Beedon is helping them.

(LAUGHTER)

CHLOE BEEDON: I like your sweater. It's so cute.

UNIDENTIFIED WOMAN #2: Thank you, thank you.

BEEDON: A lot of little snowmen on there.

NICKISCH: Beedon is attending to the store's four self-service lanes.

BEEDON: Are you going to use the self-checkout?

UNIDENTIFIED WOMAN #3: Yes.

BEEDON: Yay.

NICKISCH: Every so often, she catches items that customers did not scan.

BEEDON: Oh yeah. Here, I'll do it for you 'cause it's not...

DOUG HAWORTH: That is what we call aggressive hospitality.

NICKISCH: Doug Haworth is in charge of loss prevention at Wood's Supermarkets. And he says the aggressive hospitality is a tactic to reduce theft.

HAWORTH: You know, at a self-checkout, if the intent is to leave the store without paying for everything, what we've seen is they usually make it worth your while.

NICKISCH: And that's costing stores big time. Richard Hollinger studies theft for the National Retail Federation. He says many companies are removing their self-checkout lanes, claiming customers don't like them. In reality, he says they're just losing too much money.

RICHARD HOLLINGER: That's what they've told me, is that they've done the cost-benefit analysis, and there were some negatives that they never really anticipated.

NICKISCH: One reason is that at self-checkout, wannabe shoplifters have a great excuse.

MALAY KUNDU: If I didn't scan everything, I can say, oh, yeah, I couldn't tell what was going on, you know, it was confusing, and it was beeping at me. Right?

NICKISCH: Malay Kundu is the CEO of StopLift, a Massachusetts company that uses computerized video analysis to flag shoplifting.

KUNDU: So, check this one out. Here, he's got a basket of stuff that he's not ringing up and...

(SOUNDBITE OF BUZZING)

KUNDU: ...watch that. He just kicks the basket across the floor because, honestly, the easiest way to beat the self-checkout is just not to put the stuff on there in the first place.

NICKISCH: The company's videos show people scanning only some items and putting others directly into the basket. Or they ring up pricey produce at the price of bananas. Or they scan cheap items and put more expensive ones on the weight sensor.

KUNDU: A liter of vinegar and a liter of vodka weigh the same.

NICKISCH: Amazingly, in one video, a shoplifter calls over the attendant after having trouble getting her coupons accepted.

KUNDU: This is a pretty common thing because you might as well get a discount on the few things you paid for.

NICKISCH: Right now, StopLift's service only tells stores after the fact which transactions to follow up on.

KUNDU: OK. I've got some items, so I'm going to scan the first one.

NICKISCH: But Kundu is testing a system that would alert employees in real time.

KUNDU: And let's see here...

(SOUNDBITE OF BEEPING)

KUNDU: As you see, intervention required.

NICKISCH: For now, though, many retailers are holding off or staffing up with aggressive hospitality.

BEEDON: Hi, there. Are you excited for Christmas?

NICKISCH: So, when that self-checkout attendant is super nice to you this weekend, she may just be making sure that you're not being super naughty.